Reinsurance News

Newfront raises $200m at $2.2bn valuation to modernise insurance

12th April 2022 - Author: Jack Willard

San Francisco-headquartered broker, Newfront Insurance has announced a $200 million investment at a $2.2 billion valuation to modernise insurance, led by the Growth Equity business within Goldman Sachs Asset Management and B Capital.

newfront-insurance-logoFurther participation in the round came from existing investors including Founders Fund and Meritech Capital.

“The nature of risk has changed drastically over the past century but the insurance industry has not modernized to meet these new challenges,” said Newfront Co-Founder and CEO Spike Lipkin. “This investment furthers Newfront’s commitment to building the modern platform for clients, insurance professionals, and trading partners.”

In a press release it states that Newfront plans to grow its technology teams and focus in particular on harnessing data-driven insights for clients.

Furthermore, the company plans to invest in specialised client resources and experts across a wide variety of industries and expand across the US.

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The financing also serves as further validation of the merger of Newfront and ABD, which occurred in August 2021.

In just seven months, the company has already launched a new client dashboard, refined benchmarking capabilities, welcomed over 200 new colleagues, and also experienced record-breaking growth while achieving profitability.

Executive Chairman of Newfront, Kurt de Grosz, said: “Newfront is the model our industry desperately needs– one that puts clients and colleagues at the centre and where shareholder returns are connected to delivering client value.”

President of Newfront, Brian Hetherington, added: “We are finding that talented brokers and insurance professionals are voting with their feet and leaving 100 year old platforms to join us in pursuit of a better client and colleague experience. There has never been a better time to join Newfront.”

Co-Founder and CTO of Newfront, Gordon Wintrob, also added, “Our technology teams have spent five years converting pen and paper and systems of record into a system of action that improves the experience for clients, colleagues, and trading partners. Structured data will transform our industry.”

Furthermore, Vice President within Goldman Sachs Asset Management, Paul Pate, said: “We see modern, full-stack platforms transforming large parts of financial services, and we believe Newfront’s marriage of technology, people, and domain expertise represents the future of the insurance industry. We are proud to support Spike, Kurt, Gordon, Brian, and the entire Newfront team as they continue to scale the platform and move the industry forward.”

Partner at B Capital, Matt Levinson, also commented, “At B Capital, we seek to back generational companies with broad platform potential. Newfront has a unique opportunity to achieve this as the sole modern insurance and benefits broker.

“Fundamentally, Spike and the team understand that enterprises will always want to work with a human broker, as their needs are nuanced and policies don’t fit a template. What the industry really needs is the ‘bionic broker’ – the most talented brokers in the country powered by the best technology stack. As Newfront continues to build an important distribution channel, we believe they will have opportunities to innovate up and down the insurance stack – across product, capital, claims, and risk management.”

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